According to two people familiar with the matter, Gland Pharma investors, including KKR, may sell a stake of up to 74 percent under the automatic approval route to China's Fosun International after failing to secure government approval for an 86-percent stake sale so far, reported livemint.com.

The new structure is being considered as an alternative in case approval for the deal, which is pending before India's Cabinet Committee of Economic Affairs (CCEA), falls through.

The two people said "both sides have extended the exclusivity period to conclude the deal to end of September."

Shanghai Fosun Pharmaceutical agreed to acquire roughly 86 percent in Gland Pharma for $1.3 billion in July 2016. The deal has been cleared by India's Foreign Investment Promotion Board and the Competition Commission of India, and was referred to the CCEA in April.

Last month, Bloomberg reported that the CCEA has blocked Fosun's bid, but that the companies have not been formally told about the decision.

Media reports since then have cited the delay in approval to a surge in border tensions between India and China, as well as concerns over the transfer of technology to Chinese companies, the news source added.